Category: Carry Trade
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Rogue Trader
Nick Leeson, the infamous trader whose 1.4B loss led to the collapse of Barings Bank 30 years ago. Leeson reflects on his overwhelming feelings of embarrassment and shame stemming from his role in the bank’s downfall, emphasizing that despite a successful start to his banking career, he ultimately failed to achieve what he wanted.…
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Explainer…
The Nikkei index experienced its second biggest decline in history, and the unwinding of carry trades and the Bank of Japan’s ultra-easy monetary policy were identified as primary reasons for the selloff. Buffett’s Berkshire Hathaway recently increased its cash holdings and sold a significant portion of Apple stock, leading to concerns about his bearish outlook…
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VIX Explosion
Yen Carry Trade Deep Dive,” Brent Johnson discusses the concept of a carry trade and how Japan’s zero or negative interest rates for decades have made the Japanese Yen an attractive currency for this investment strategy. However, when the currency starts to appreciate or interest rates rise, the cost of carry can exceed the return, leading…